Chain who paved way for family restaurants bought out

10/12/2011
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Skylark's popular Gusto Restaurants

TOKYO (majirox news) — Japan’s Skylark chain of restaurants has been acquired for roughly 260 billion yen ($3.4 billion) by Bain Capital LLC, America’s turnaround specialist. In the past, Bain has rebuilt such struggling U.S. restaurant chains as Burger King and Domino’s Pizzas.

Skylark is more than just another restaurant chain. Its restaurants may have triggered an entire change in Japanese mores and customs.

It started out in 1968 as a supermarket, but was soon in trouble because it didn’t have a big enough parking lot, so it switched to the restaurant business. The first Skylark opened in 1970 at Chofu in Tokyo, with a huge parking lot and huge determination to be an American style family restaurant.

“This was right at the start of Japan’s boom years,” said Marie MacCafferty, a former editor of Puget Soundings magazine who wrote on Skylark’s activities in the Seattle area. Skylark bought a Seattle restaurant chain called the Red Robin, which started as an eclectic conglomeration of bars.

“They believed that the restaurant business in Japan would become ‘motorized’ like the U.S,” she said. “They came to the U.S. to learn how to do it.”

Based on what they saw in the U.S, Skylark opened scores of Denny’s like family restaurants in Japan, which was exactly in tune with what the public wanted; a place to end up after they went out cruising.

Gontaro Tanaka a pub and restaurant owner in Tokyo, says, “Prior to Skylark, there really wasn’t any such thing as a family restaurant. They quickly established a formula of placing their restaurants on main traffic arterial. But most importantly, they pioneered an entire new social phenomena; going out with ‘my family’ to eat. Maybe this was common in the U.S. but in Japan it was absolutely revolutionary.”

Prior to family restaurants, men went out with other men from their company to eat and drink together. In many cases it was almost nightly and alcohol charged, with no time for the family. Skylark completely changed this social pattern and for the first time supplied an atmosphere comfortable and compelling for families to go out together.

“I don’t think it would be too great an exaggeration to say that it broke a whole pattern of male supremacy that existed up to then,” he said. “Families and couples going out together on dates or just for fun was something new. Skylark had a lot to do with this and Skylark was reacting to a strong but unvoiced need in Japanese society.”

As well as family restaurants, Skylark expanded into themed restaurants such as Italian and Chinese, elaborately decorated with extensive antique collections, and later launched a highly popular chain of discount restaurants called “Gusto.” Eventually Skylark came to run several thousand restaurants throughout Japan.

The problem was that its formula was easily copied and often done better by its competitors. Also, the edge of newness and novelty wore off as the entire social phenomena became the new norm.

By 2000, they were in trouble with a concept that was becoming dated and restaurants that were in direct competition within their own group. In 2006, a management buyout brought in Nomura investments and a UK investment fund as the principal owners, which led to the firing of the president in 2008. They also shut down a large number of money losing restaurants.

With the coming of Bain Capital a new chapter is about to begin. Originally founded on what the owners of Skylark saw as an American model of management, a change is about to take place as Skylark is now under genuine American management.

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